Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nintendo will release its Q2 financial results this Tuesday, and we forecast operating profit (OP) to come in at ¥54 billion</li>
<li>We expect Nintendo may revise its full year guidance downward to reflect softer demand for Switch hardware.</li>
<li>In the short term, however, a bearish stance may be prudent, especially if Q2 results disappoint and Nintendo refrains from disclosing a Switch 2 timeline</li>
</ul>


Nintendo will release its Q2 financial results this Tuesday, and we forecast operating profit (OP) to come in at ¥54 billion
We expect Nintendo may revise its full year guidance downward to reflect softer demand for Switch hardware.
In the short term, however, a bearish stance may be prudent, especially if Q2 results disappoint and Nintendo refrains from disclosing a Switch 2 timeline


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

<ul>
<li>Tariff Headwinds: U.S. import tariffs could wipe out hardware margins, potentially costing Nintendo up to ¥95bn in FY3/26 gross profit.</li>
<li>Guidance Risk: With bullish consensus expecting ¥450bn in FY3/26 operating profit, upcoming guidance on July 5 may significantly disappoint.</li>
<li>Valuation Hinges on Recovery: FY3/27 earnings could rebound to ¥600bn if cycle normalises and tariff risks ease—implying a fair 13x EV/EBIT multiple.</li>
</ul>


Tariff Headwinds: U.S. import tariffs could wipe out hardware margins, potentially costing Nintendo up to ¥95bn in FY3/26 gross profit.
Guidance Risk: With bullish consensus expecting ¥450bn in FY3/26 operating profit, upcoming guidance on July 5 may significantly disappoint.
Valuation Hinges on Recovery: FY3/27 earnings could rebound to ¥600bn if cycle normalises and tariff risks ease—implying a fair 13x EV/EBIT multiple.


Nintendo (7974) | Next-Gen Switch 2 Meets Next-Level Margin Risk

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of MSCI Japan in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Toyota Motor, SoftBank, Rakuten, Kioxia, Sony Financial, Ebara, Honda Motor, Softbank, Ebara, Kioxia, Toyota Motor, Honda Motor, Sony Financial, Rakuten.</li>
</ul>


We analysed the earning revision of component stocks of MSCI Japan in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Toyota Motor, SoftBank, Rakuten, Kioxia, Sony Financial, Ebara, Honda Motor, Softbank, Ebara, Kioxia, Toyota Motor, Honda Motor, Sony Financial, Rakuten.


MSCI Japan Index Earning Revision (Nov): Toyota Motor, SoftBank, Rakuten, Kioxia, Sony Financial

<ul>
<li>Switch slowdown: Nintendo’s Q3 revenue and profit fell sharply as the ageing console nears the end of its cycle, missing hardware sales expectations.</li>
<li>Guidance cut: Full-year revenue and profit forecasts were lowered, but investors remain focused on the upcoming Switch 2 launch.</li>
<li>Muted upside: Switch 2 is an incremental upgrade, unlikely to expand the market significantly or boost Nintendo’s valuation beyond its current fair value of ¥9,000 per share.</li>
</ul>


Switch slowdown: Nintendo’s Q3 revenue and profit fell sharply as the ageing console nears the end of its cycle, missing hardware sales expectations.
Guidance cut: Full-year revenue and profit forecasts were lowered, but investors remain focused on the upcoming Switch 2 launch.
Muted upside: Switch 2 is an incremental upgrade, unlikely to expand the market significantly or boost Nintendo’s valuation beyond its current fair value of ¥9,000 per share.


Nintendo (7974)| Nintendo: Switch 2 Can’t Come Soon Enough

Japan

Nintendo Co., Ltd. develops, manufactures, and sells household leisure equipment. The Company produces home use video game hardware and software products. Nintendo markets its products throughout Japan.

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Nintendo (NTDOY US)

Nintendo (7974) | Q2 Earnings Preview

Nintendo's Q2 financial results expected to show ¥54 billion operating profit, but full year guidance may be revised down due to softer Switch...

Mark Chadwick

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Nintendo (7974) | Next-Gen Switch 2 Meets Next-Level Margin Risk

US import tariffs could greatly impact Nintendo's profits, with upcoming guidance potentially falling short of expectations. Recovery in FY3/27...

Mark Chadwick

MSCI Japan Index Earning Revision (Nov): Toyota Motor, SoftBank, Rakuten, Kioxia, Sony Financial

We analyzed MSCI Japan's consensus for Nov 2025 and highlighted changes of EPS in Toyota Motor (7203 JP), SoftBank (9984 JP), Rakuten (4755 JP),...

Ke Yan, CFA, FRM

Nintendo (7974)| Nintendo: Switch 2 Can’t Come Soon Enough

Nintendo's Q3 revenue and profit decline as aging Switch nears end of cycle, investors eye Switch 2 launch for potential growth.

Mark Chadwick

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52-week Range

Market Cap (USDm)

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Nintendo (7974) | Q2 Earnings Preview

​Nintendo's Q2 financial results expected to show ¥54 billion operating profit, but full year guidance may be revised down due to softer Switch...

Mark Chadwick

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Nintendo (7974) | Next-Gen Switch 2 Meets Next-Level Margin Risk

​US import tariffs could greatly impact Nintendo's profits, with upcoming guidance potentially falling short of expectations. Recovery in FY3/27...

Mark Chadwick

MSCI Japan Index Earning Revision (Nov): Toyota Motor, SoftBank, Rakuten, Kioxia, Sony Financial

We analyzed MSCI Japan's consensus for Nov 2025 and highlighted changes of EPS in Toyota Motor (7203 JP), SoftBank (9984 JP), Rakuten (4755 JP),...

Ke Yan, CFA, FRM

Nintendo (7974)| Nintendo: Switch 2 Can’t Come Soon Enough

​Nintendo's Q3 revenue and profit decline as aging Switch nears end of cycle, investors eye Switch 2 launch for potential growth.

Mark Chadwick

Nintendo's Q2 financial results expected to show ¥54 billion operating profit, but full year guidance may be revised down due to softer Switch...

US import tariffs could greatly impact Nintendo's profits, with upcoming guidance potentially falling short of expectations. Recovery in FY3/27...

Nintendo's Q3 revenue and profit decline as aging Switch nears end of cycle, investors eye Switch 2 launch for potential growth.